Tunisia Construction and Business News
EU Provides Tunisia with Second Macro-Financial Assistance Loan
October 10, 2017
On October 9, Tunisia was approved by the European Commission -- on behalf of the European Union -- for a €200 million loan.
This disbursement marks the launch of the second Macro-Financial Assistance (MFA-II) programme to Tunisia. A total of €500 million will be disbursed in three instalments in 2017 and 2018.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "Today's disbursement to Tunisia is proof of our strong commitment to support the successful economic recovery of one of our closest neighbours. With a renewed sense of urgency, Tunisia has reaffirmed its dedication to an effective partnership. The EU stands firmly with Tunisia in achieving prosperity for all of its people."
The second Macro-Financial Assistance programme was proposed following the terrorist attacks of 2015, which contributed to halting Tunisia's economic recovery. This had a significant impact on the country's balance of payments position and financing needs. The programme was agreed by the Council and the European Parliament on 6 July 2016.
The second and third instalments of the MFA-II (amounting to €150 million each) will be tied to the implementation of a number of policy conditions targeting fiscal consolidation as well as the improvement of Tunisia's social assistance schemes and business climate.
The EU's strategy of assistance to Tunisia also includes budget support programmes under the European Neighbourhood Instrument (ENI), of which Tunisia is a major recipient among the Southern Neighbourhood countries, and substantial loans from the European Investment Bank.
Macro-Financial Assistance is an exceptional EU crisis response instrument available to the EU's neighbouring partner countries. This instrument is complementary to assistance provided by the International Monetary Fund. MFA loans are financed through EU borrowing on capital markets. The funds are then on-lent with similar financial terms to the beneficiary countries.
The Commission proposed the MFA-II programme for Tunisia on 12 February 2016. The European Parliament and the Council adopted it on 6 July 2016.
The new programme follows on from a €300 million Macro-Financial Assistance programme approved in 2014.
Since the revolution of 2011, the EU has continuously and increasingly supported Tunisia in its transition to democracy.
During the Association Council meeting on 11 May 2017, the Minister of Foreign Affairs of Malta George Vella, on behalf of High Representative Federica Mogherini, reiterated the importance attached by the EU to its cooperation with Tunisia, its Privileged Partner. The Joint Communication of the EU High Representative and the European Commission of 29 September 2016 'Strengthening EU support for Tunisia', and the Council Conclusions of 17 October 2016, also confirm the commitment of the EU and its Member States.
The two MFA operations supplement the grant funding provided by the EU to Tunisia under the European Neighbourhood Policy and its financial instrument, the ENI. EU grant assistance to Tunisia since the 2011 revolution has so far amounted to over € 1 billion.
The EU's relations with Tunisia also go beyond financial assistance and development funding. Under their 'Privileged Partnership', the EU and Tunisia strive to cooperate on a broad spectrum of policy areas and identify opportunities to support Tunisia's transition and strengthen ties between Europeans and Tunisians. This is done through initiatives such as: Creative Europe, which supports cultural diversity; Horizon 2020, the EU's research and innovation programme and Erasmus +,which promotes mobility for European and Tunisian students and academics.